Sustaining a niche business

She has also expanded beyond Australia, so although the percentage of consumers who require Quit Nits may not have changed much, it's coming from a world population. "Europe has been a really good market for us, we’ve sold into major pharmacy chains Boots, Lloydspharmacy and Richard Ward salons. We’re going to have an aggressive marketing campaign in the countries we sell to, so we can strengthen our position."

Product and brand are not the only things connecting a niche company to the market, Preston has also anchored Wild Child with her profile. By representing her company at awards and writing a book, Leanne Preston and the Wild Child Story (Random House), Preston represents the principles behind the business and can highlight issues—such as poisonous children’s medication and toxins in the environment—in a personable, rather than corporate, manner.

Established niche businesses need to keep an eye on their target consumers because as society's tastes and preferences change, so will the market. This means you will either need to evolve with the market or innovate and find new markets. Lavecky says her business has done both–her response to customer feedback has increased her product range, but Lotus & Ming has also sold into areas she didn't anticipate.

"We’ve started doing some product development for the Greater Union group. Gold Class is their premium cinema and we have been asked to develop products for their menus," she says. "We also recently began working on a range of healthy Asian-style products such as large baked spring rolls for school canteens. They are all low in fat, giving children a healthier option for snacking at school. It was not at a retail level, nor at a corporate level, school was not something we had taken into account at the beginning."

Another area where niche businesses can be flexible is 'co-opetition', which Kapeleris says is a combination of co-operation and competition. He points out that a niche may be defined by the way a product reaches the market. For example, eBay took an existing auction format but modified it for the internet, which seemed to compete with online retailers until those retailers realised they could use eBay as a way to sell their products to consumers who may never have discovered their brand otherwise. "In my previous work in the biotech sector I found that with some of my competitors, even though we were competing in one market sector we were using them as distribution channels in other markets," says Kapeleris.

Nurturing a niche product or service can be a difficult process if you don't have a clear profile of your market. But if you do your research thoroughly and develop a product identity, it is no more difficult than starting any other type of business. Once you’ve navigated the early stages, continual innovation is the key to sustaining your corner of the market, and even capturing new consumers. A niche business will excel by exploiting its lead in the marketplace and leveraging differences. With this advice in mind, isn’t there a little niche to exploit in all businesses?